The White Hills Co

question 276

Multiple Choice

The White Hills Co. has expected earnings before interest and taxes of $8,100, an unlevered cost of capital of 11%, and debt with both a book and market value of $12,000. The debt has an annual 8% coupon. The tax rate is 34%. What is the value of the firm?

• A) $48,600
• B) $50,000
• C) $52,680
• D) $56,667
• E) $60,600

---

Definitions:

Metaphors

Figurative language used to represent concepts or ideas by comparing them explicitly or implicitly to something else.

Analogies

Comparisons made between two different things that highlight a similarity or relational understanding.

Tendency

An inclination or predisposition towards a particular characteristic, behavior, or pattern.

Negotiators

Parties engaged in discussion to settle differences or reach an agreement, utilizing various strategies and tactics in the negotiation process.